To diversify my portfolio should I invest in ELSS Funds

As your salary is Rs 50,000 per month and annual Rs 600,000, we think, you should focus on investments for tax savings. Your PPF Investment is 1 Lakh as you have mentioned. But, we are not sure if this is your PPF account balance or you are saving Rs 100,000 per annum in PPF for saving taxes. Whatever the case, please note that ELSS is the best tax saving option under Section 80C of The Income Tax Act 1961 as you will find in this article https://www.advisorkhoj.com/articles/Equity-Linked-Savings-Scheme/How-ELSS-Mutual-Funds-can-be-your-best-tax-saving-option. You can invest a maximum of Rs 150,000 per annum under this section.

You should prioritise your investments in ELSS funds. Currently, you are investing only Rs 2,000 through SIP in an ELSS Fund. The amount of Rs 4,000 that you want to invest additionally should be allocated to investments in ELSS Funds. You are already investing in a good ELSS fund, AXIS Long Term Equity Fund. You can select one more fund from this selection – DSP BlackRock Tax Saver Fund, Birla Sun Life Tax Relief 96 and Reliance Tax Saver Fund and start the SIP of Rs 4,000.

Hope the above helps! Thanks for writing to Advisorkhoj.